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5.7 Income taxes
Income taxes are accounted for in accordance with IAS 12.
Accordingly, all income taxes, tax liabilities or claims accrued during
the course of the financial year are incorporated into the annual
statement in accordance with the tax laws applicable to the group
companies. Deferred tax assets and liabilities are provided in respect
of timing differences between the tax basis of an asset or liability and
its reported amount in the consolidated financial statements and for
the tax effects of loss carry forwards. Deferred tax liabilities are
calculated using anticipated tax rates for those years in which the
timing differences are expected to reverse.
During 2002 the Company carried on its restructuring programme to
ensure that subsidiaries resident in the same tax jurisdiction can
benefit from group tax relief arrangements. Income taxes are incurred
primarily within the group companies in the UK, Germany, France,
Italy and Spain.
The income tax expense for financial years 2002 and 2001 is
analysed as follows:
30
2002 2001
€ k € k
Current tax expense 1,267 725
Under/(over) provided in prior years 338 -98
Deferred tax (credit)/charge -330 -293
1,275 334
The result before tax is reconciled to the income tax charge as
follows:
2002 2001
€ k € k
Loss before tax
Income tax expense/(credit)
34,221 11,273
using domestic corporation tax rate -13,346 -4,284
Effect of tax rates in foreign jurisdictions 576 -131
Effect of non-deductible business expenses 656 434
Effect of non-deductible goodwill amortisation 8,847 1,599
Effect of tax losses not provided 5,089 2,814
Utilisation of prior year tax losses -885 –
Under/(over) provided in prior years 338 -98
Income tax expense 1,275 334
Deferred tax assets/(liabilities) are made up of timing differences as
follows:
31.12.2002 31.12.2001
€ k € k
Fixed assets 465 137
Accounts receivable – -15
Other provisions – 18
Other assets – -5
5.8 Interest and similar expense
Interest and similar expense is analysed as follows:
465 135
2002 2001
€ k € k
Interest payable
Unrealised exchange losses on
399 459
forward exchange contracts
Provision for negative market
– 171
value of options – 183
399 813